Safaricom is banking on M-Pesa and data revenues to drive the next growth phase as the telco marks hitting 30 million active subscribers.
The company has over the last two decades expanded its portfolio from offering just voice and SMS into other areas such as education, agriculture, health and financial services and is now looking to consolidate the gains made in those areas.
“We would like to thank each of our more than 30 million customers for choosing Safaricom as their preferred network which has contributed to our achievement of this remarkable and historic milestone,” said Chief Customer Officer Sylvia Mulinge.
Mulinge made the remarks during a ceremony in which Safaricom recognised its 30 millionth customer, Denis Muthii, aged 19. The firm said it will fulfil his ambition to join a leading technical institution in the country. Muthii will see Safaricom fund his tuition and upkeep for a technical course in Mechanical Engineering.
Data from the company’s latest earnings report indicates the company currently counts more than 21 million active users on M-Pesa who, on average, make 12 transactions each, every month.
Annual revenue per user (ARPU) on the service has also risen 10 per cent in the last one year to Sh284.
The company is strategically positioning itself for the not-too-distant future where big data will form the bulk of revenue for telecommunication companies, with M-Pesa being central to this strategy.
While earnings from voice continue to make a large part of Safaricom’s revenue basket, growth has plateaued in recent years.
According to the company’s financial reports, growth in voice revenue has fallen from 8.5 per cent in the 2008/2009 financial year to 1.4 per cent recorded in the 2018 half year.
Today, it is becoming more urgent for Safaricom, the current market leader in the country’s digital economy, to reposition itself for the growing big-data economy. In addition to falling incomes from traditional sources, increasing regulatory and competitive pressures are other catalysts that are driving Safaricom’s shift.
This has informed the company’s shift towards data analytics, with a runaway success in M-Shwari and KCB M-Pesa which now account for the bulk of new loans recorded in the country’s financial sector.
The recent launch of Fuliza, the overdraft facility on M-Pesa that allows users with limited finances in their wallets complete their transactions, has also been a pointer to the revenue opportunity in combining data analytics and mobile money.
Safaricom, which will later this year mark 19 years since being founded, has further spent more than Sh100 billion in the last three years to lay down network infrastructure.
Currently, the company covers almost half of the country’s population with 4G mobile connectivity while its 3G and 2G networks reach more than 91 per cent and 96 per cent of the population respectively.